Offer

Question 1

Offeror

Answer 1

1. The offeror is the person who first proposes the contractual relationship; it is their function to initiate the contract process and to determine the boundaries of the agreement under the common law
2. It is the offeror who creates all the provisions of the contract

Question 2

Offeree

Answer 2

Once the offer has been made, the power or ability to create the contract rests with the offeree; this is the key element of all contractual relationships

Question 3

Offer

Answer 3

1. An offer is a proposal by one party, the offeror, to a second party, the offeree, manifesting an intention to enter into a valid contract
2. The terms of the offer are the terms of the contract

Question 4

3 conditions that must be met for a proposal to qualify as a contractual offer:

Answer 4

1. The offeror must manifest a present contractual intent
2. The offer must be communicated to the offeree; and
3. The offer must be certain and definite with respect to its terms

Question 5

Present Contractual Intent

Answer 5

For the offer to have legal validity, it must appear to an objective, reasonable person that the offeror actually intended to make an offer

Question 6

Communication to the Offeree

Answer 6

1. It is the offeree who has the power to create a valid contract by making the acceptance, but that acceptance can occur only if the offeree is aware of the offer
2. communication are all considered legally sufficient methods of communication

Question 7

Certainty and Definiteness in the Terms of the Offer

Answer 7

The more certain and definite the proposal, the more likely it is that the court will construe the proposal as an offer to create a valid contract

Question 8

To determine that the terms are indeed definite and certain, the law looks for the presence of 4 essential elements:

Answer 8

1. The price of the contract
2. The subject matter of the contract
3. The parties to the contract
4. The time of performance for fulfilling the contract

Question 9

To uphold contracts and consequently the legal expectations of the parties, the court will, under certain circumstances, apply the concept of ___________.

Answer 9

… “reasonableness” with respect to a contract provision that the parties have neglected to include
* the court will not insert “reasonable” terms if the parties have attempted to specify a term but have done so badly

Question 10

If the parties completely neglect to mention a specific price, then __________.

Answer 10

… the court can interpret a “reasonable price” and then entertain evidence as to what the reasonable price would be
* The court can only apply the reasonableness rule if the term has NOT been mentioned at all, or the parties state “reasonable price” themselves

Question 11

The UCC exceptions to contracts for the sale of goods between commercial traders, will permit contracts be formed even if…

Answer 11

…if the price is not quoted

Question 12

Terms such as “______” or “_____” are too uncertain to be enforceable; the court can only interpret “_____”

Answer 12

fair profit; fair price; reasonableness

Question 13

Subject Matter

Answer 13

The subject matter of a contract is another example of the consideration for the contract; any description of the subject matter that is inconclusive, vague, or ambiguous will cause the contract to fail

Question 14

Ambiguity

Answer 14

if the subject matter is described in terms that are capable of more than one interpretation, the offer is deemed ambiguous and will not stand

Question 15

Alternate Offers

Answer 15

the offeror may offer to the offeree alternative subject matter; provided that each alternative is certain and definite, the offeror is considered to be making two offers; acceptance of one cancels the other

Question 16

Output Contracts:

Answer 16

When one party agrees to purchase all of the output of the other party for a specified price

Question 17

requirements contract

Answer 17

When one party agrees to purchase form a supplier all supplies actually used during a given period

Question 18

time of the essence clauses

Answer 18

the element of time must be made a specific term of the offer; this clause create a specific enforceable duty on the part of the deliverer to convey the goods by the specified time or be in breach of contract

Question 19

The UCC states that the absence of one or more of the preceding elements of an offer will NOT render the offer invalid; this exception is based on _____.

Answer 19

…the presumption that the merchants intend a contract and, as business professionals, are best able to determine the essential requirements of their contracts

Question 20

Regardless of any defect in the terms of the offer, if the parities to the agreement have performed or have started to perform, _____.

Answer 20

…any defect can be cured by their actual actions

The parties’ acts will be construed as creating the specifics of the vague term